Consider Toyota's PPF, which measures cars on the x-axis and new skills and new technology on the y-axis. Toyota's opportunity cost of upgrading workers' skills and creating new technology is
A)increased worker productivity.
B)zero.
C)more cars produced in the future.
D)fewer cars produced in the current year.
E)dependent on whether other car manufacturers also upgrade workers' skills and create new technology.

Question

Quizplus · Accepted Answer

According to the definition of opportunity cost, it is the cost of the next best alternative forgone. In this case, if Toyota chooses to upgrade worker skills and create new technology, the opportunity cost would be the number of cars that could have been produced in the current year if they had not invested in these activities. Therefore, the best answer is D - fewer cars produced in the current year.

Consider Toyota's PPF, Which Measures Cars on the X-Axis and New